FTSE 100 Analysis | Signals | Forecast | Prediction | FTSE 100 Outlook | Trading help
Markets tumbled across the world on Monday as fears of a new Chinese lockdown sparked panic buying in Beijing. Around £40bn was wiped off the FTSE 100 which dropped 1.9pc, amid concerns over a wave of draconian restrictions to prevent the collapse of China’s zero Covid policy.
Economists warned the world’s second-largest economy may already be in recession, with pain likely to spread to the rest of the globe.
US crude oil fell below $100 a barrel and iron dropped as much as 11pc on expectations of a drop in demand as factories around China are shut for weeks, potentially sparking another wave of severe shipping disruption that will cause goods shortages in the West.
Germany’s DAX fell 1.5pc and the French CAC closed down 2pc, on the day of Emmanuel Macron’s reelection.
Wall Street traded down for much of the day but swung back into the green late on as investors cheered the Twitter deal. The S&P 500 added 0.6pc.
Earlier in the day Shanghai’s CSI 300 fell 5pc to its lowest close in two years.
Stocks climbed Tuesday after China’s pledge to boost monetary-policy support for the nation’s Covid-hit economy assuaged some of the concerns about the outlook for the global recovery.
An Asia-Pacific equity index rose for the first time in four sessions amid a more than 5% jump in technology shares in Hong Kong and a partial rebound in Chinese bourses from their plunge Monday. U.S. equity futures edged up and European contracts added about 1.5%
Aside from vowing more assistance, the People’s Bank of China also said it will promote healthy and stable development in financial markets. Most of Beijing is being tested for the virus, fanning fears of an unprecedented lockdown there.
Treasuries slipped along with the dollar and oil advanced in a sign of steadier investor sentiment. But the risk of an economic downturn from China’s lockdowns, as well as aggressive Federal Reserve policy tightening to quell inflation, continues to hang over markets.
The yuan pushed higher after the PBOC on Monday cut the amount of money banks must set aside in reserve for foreign-currency holdings, effectively boosting the domestic supply of dollars.
FTSE 100 live outlook prediction analysis for 26th April 2022
The bears took it below the 7385 support level in the end yesterday as fear gripped the markets, however the 7340 level held in the end and kick started a boost to get the market back above 7400. For the moment the trend is bulls to start the day so in theory buying the dip this morning is the preferred play. The bulls have just managed to push the FTSE100 past the 2h Hull MA resistance line at 7470, but a dip down to the 30m coral with is now green would make sense before more of a push later.
The Dax40 and S&P500 are both testing their 2h Hull MA resistance levels at 14150 and 4305 to start with and it is them that may pull the FTSE back initially. A dip down on them to the 14000 and 4250 areas would make sense and fit well this morning to then spring back up from.
The FTSE100 therefore could well follow a similar pattern, and I am watching the 7400 level which is that 30m coral line.
Below the 7400 level the 7357 is S1 and the key fib and the bears would be keen to revisit that area, though I am thinking that the bulls may well stage a fightback today. Quite often if we don’t get the bull Monday then the Tuesday isn’t particularly bearish.
For the bulls, above the 7511 level which is the first key resistance level above this opening area at 7470, the bulls will be keen to target the 7587 R2 level.
The daily coral remains green showing an uptrend at the moment though the spike below looked bearish at the time yesterday, it may of course also just been the market going for stops using the China news on Covid as the excuse… we shall see over the next few weeks!
S&P500 & Dax40
As mentioned they are both on their 2 hour resistance levels so a dip and rise may well play out. I am watching the 4250 level for support on the S&P and the 14000 level on the Dax where we have the daily pivot and the 30m coral.
Good luck today.
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